U. S. DISTRICT COURT
Ellicottville businessman admits cheating 2 investors
An Ellicottville businessman pleaded guilty in federal court Monday to defrauding two investors out of millions of dollars.
Robert C. Logel, 46, pleaded guilty to a felony wire fraud charge before U. S. District Judge William M. Skretny.
The U. S. attorney’s office said Logel could be required to pay up to $5.8 million in restitution to investors who were given false information by Logel, who was arrested in August after a lengthy FBI investigation.
Logel is the founder and former managing director of Spaulding Ventures, an Amherst firm that specialized in raising money for new and growing companies, authorities said. He previously worked as an executive in the banking industry.
According to court documents, Logel gave false information to Kent Keehn, a Texas man who invested more than $2.2 million with him, and to Charles Bares, an Ellicottville dairy farmer who invested more than $448,000 with him.
Logel falsely told Keehn that his millions would be invested in two companies, Smartpill and Freedom 4Wireless, but Logel did not invest the money in those ventures.
“Logel would falsely assure Mr. Keehn that proof of ownership was forthcoming, but Logel could not produce proof of ownership, such as stock certificates issued by the companies,” Assistant U. S. Attorney Paul J. Campana said.
Bares was falsely told by Logel that $75,000 of his money would go toward a short-term loan to Native RX, a Native American pharmaceutical company in Salamanca, and that $335,000 would be used to acquire pharmaceutical products at a low cost, Campana and FBI agents said.
In fact, $75,000 of Bares’ money was sent to an account controlled by Keehn, and then Logel directed Keehn to send $25,000 to Bares. Bares was also falsely told that his investments had made a healthy profit, authorities said.
In February 2007, Bares tried to cash a $600,000 check that Logel sent him, but Bares found that “when he learned that the account against which the check had been written was closed,” Campana said.
Efforts to reach Logel and his attorney, Joseph M. LaTona, were unsuccessful.
Campana said Logel was under investigation by FBI agents for more than five years.
According to Cattaraugus County land records, Logel in January 2002 paid $34,500 for 4.4 acres of land on Plum Creek Road in the Town of Mansfield, near the Holimont Ski Resort in Ellicottville.
In February 2004, according to the land records, Logel sold the land for $1 to his wife, Kimberly Logel, and she is now listed as owner of a home there with an $950,000 assessment.
Under advisory sentencing guidelines, Logel could face a prison term of 41 months to 51 months at his sentencing, which is set for Aug. 12.
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